Is there anyone who believes we can raise taxes enough to balance the budget without destroying the economy?
The tax increase would be around 12 trillion over the next 10 years.
2013-01-12T22:18:53Z
Wouldn't every extra dollar taken in taxes be one less dollar available for spending in the economy? 75% of economic growth comes from consumer spending. If the consumer doesn't have it to spend due to taxes? The more the economy slows the less tax money the government would get. Unemployment would go up which also costs the government money.
2013-01-12T22:22:08Z
Vince- So if we had a 100% tax rate the economy would be booming lol?
xomoc2013-01-12T21:55:41Z
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Lol, not going to happen. Though this type of economics is well beyond almost everyone's understanding, much like quantum mechanics(particle theory), all the industrialized world is in the same boat, google up Japan's debt, so any way we will all same boat so no one is able to throw you a life buoy.
Sure, if we return to 1920-era tax rates. You know, when the rich were taxed at 95% and the poor, well, just about everyone was taxed 95%.
So, no, raising taxes alone is not going to do it. We do need to look intelligently at spending - especially military spending which I feel is way too high. We also need to look at fixing loopholes and finding other areas to reduce waste and inefficiency. Healthcare is a good example of inefficiency where an estimated 30% of each dollar spent is wasted.
All economies rely on the circulation of money. Manufacturing, farming, construction and service industries need money to be in the hands of consumers to buy their products and keep the jobs market buoyant.
It is a bit like a petrol shortage. so long as everyone is buying petrol as they need it there is plenty to go around. As soon as people start stockpiling they create the very shortage they were stockpiling against.
The same has happened with money whereby a relatively small number of people have been allowed to stockpile too much so there is not enough to go around. Taxation is one way the govt can put cash back in the hands of the consumer.
A nation that has been living beyond its means for so long will need to start payingdown its debt at some stage. If they do not, there isnotlikely to be much of an economy.